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Air travel tax hike

July 15, 2010

German airlines will have to pay up to 26 euros per passenger, according to a government bill taxing air travel. Lufthansa and Air Berlin say the charges will just push passengers abroad.

Lufthansa planes at the Tegel airport in Berlin
Lufthansa has led the criticism of the government's air tax billImage: AP

German airlines have reacted with indignation after hearing of the government's planned air travel tax of up to 26 euros ($33) per passenger.

According to a draft law obtained by several news agencies, airlines will have to pay 13 euros per passenger on short haul flights from Germany, and 26 euros for flights of over 2,500 kilometers (about 1,550 miles).

The coalition government first announced plans to introduce an environmental tax for air transport in early June, when announcing austerity measures looking to save 80 billion euros by 2014. The tax will come into play on January 1, 2011, and, according to the bill, could raise 1 billion euros a year.

Leading German carriers have protested against the measures, citing fears that customers will simply travel using airports abroad.

"We reject this tax completely," said Peter Schneckenleitner, a spokesman for Germany's biggest airline Lufthansa. "For German passengers, it will definitely make traveling more expensive. This will hit the German economy as a whole."

Lufthansa estimated the tax will reduce passenger figures by up to 5 percent, and could cause 10,000 jobs to be lost.

"This bill surpasses our worst fears," said a spokesman for Air Berlin. "This is a massive additional burden for our passengers."

Tough times for airlines

The Dutch government removed its air travel tax in 2009, after seeing passenger numbers fall significantly. "The Dutch example showed us that an air travel tax that is introduced on a national level leads mostly to a shift of passengers abroad," said Ralf Teckentrupp, president of the German Airline Association (BDF).

An Air Berlin plane takes off from the Tegel airport in Berlin
Airlines will be taxed on flights taking off from German airportsImage: AP

Air passengers have become more flexible and price-sensitive in recent years, taking advantage of low-cost airlines such as Ryanair and Easyjet. An added 13 euros for flights within Europe would see a significant hike in ticket prices.

But Lufthansa has admitted that it will not be able to pass on the planned tax charges to customers, meaning the financial burden will be met by the airline.

The airline industry has struggled from a slump in passenger numbers in recent years, while the volcanic ash cloud earlier this year caused disruption across Europe. The International Air Transport Association last month forecasted that European airlines would post losses of over 3.5 billion euros for 2010.

An environmental check

Air Berlin criticized that the tax is at a flat rate, with no regard for the class customers travel in.

Seats for passengers who transfer at a German airport, but do not make a lengthy stop-over, will not be taxed. Children under two, who do not have their own seat, will also be exempt, as will all non-commercial flights.

In addition to bolstering government funds, the charges are supposed to act as an environmental levy on airlines.

The bill suggests that the tax will be cut in 2012, when a carbon-emissions trading scheme that forces airlines to buy environmental safety certificates comes into effect.

Author: Thomas Sheldrick (AFP/Reuters)
Editor: Andreas Illmer